Problem $3-06$

Four years ago, you bought $600$ shares of Kayleigh Milk Co$.$ for $$35$ a share with a margin of $75$ percent. Currently, the Kayleigh stock is selling for $$40$ a

share. Assume there are no dividends and ignore commissions. Do not round intermediate calculations. Round your answers to two decimal places.

a$.$ Assuming that you pay cash for the stock, compute the annualized rate of return on this investment if you had paid cash.

$\%$

b$.$ Assuming that you used the maximum leverage in buying the stock, compute the annualized rate of return with the margin purchase.

$\%$